In a scathing assessment, Conrad Black has declared that no federal budget in his conscious lifetime has been as heavily anticipated yet ultimately as disappointing as the one presented by Prime Minister Mark Carney and Finance Minister Chrystia Freeland this past Tuesday. What was promised as a transformative masterpiece of "generational investments" has landed as a stultifying anti-climax, squandering immense public goodwill.
Broken Promises and Fiscal Reality
The budget, Black notes, was preceded by grand promises of "difficult choices" and "sacrifices" that would fortify public finances and define the next century. Instead, the government has jettisoned its 2023 commitment to a deficit of less than one percent of GDP. The new fiscal trajectory prepares Canadians for a deficit of two percent of GDP for several years, with the debt-to-GDP ratio actually increasing.
The government's replacement promise is a balanced operating budget within four years, a claim Black views with skepticism. He points out that the distinction between operating and capital spending is a convenient accounting measure, as the promised economic growth is supposed to be fueled by a near-doubling of capital spending over the next four years. The much-touted promise to "spend less" has withered to a plan for only $13 billion in annual savings three years from now, a trivial amount against foreseen operating expenses of $500 billion.
A Failure of Ambition on Tax and Competition
According to Black, the budget represents a colossal failure to deliver on the promised transformative originality. The government incited expectations of radical tax reform to encourage investment, including rate cuts and the elimination of special preferences. However, what is grandly described as a "productivity super-deduction" amounts to less than $3 billion annually from previously announced spending allowances.
Similarly, the budget makes only a feeble effort to incite greater competition within Canada's telecom and banking sectors, offering little more than token gestures. The long-awaited assault on supply management remains absent. Black does find a silver lining in the increase to defence spending, arguing that if conducted intelligently, it could boost high-tech industries and provide valuable adult education through career enlistments.
The Crushing Weight of Debt Servicing
A critical flaw highlighted in the analysis is the government's claim that it will only be borrowing for capital spending in the future. Black dismisses this as "bunk," arguing that the entire deficit will, in fact, be consumed by interest payments on the accumulated debt. He reveals a stark statistic: $0.13 of every dollar of government revenue will now go to service the debt, a figure that has more than doubled in just three years.
The proposed reduction in government employees is described as a mere "pin-prick" against the shocking and unsustainable total of 4.1 million public sector employees across all levels of government. In conclusion, while the budget isn't objectively terrible, it falls dramatically short of the ambitious, aggressive reform that Conrad Black believes is necessary to address Canada's uncompetitive economy and strained public finances.
